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Dream home: No longer remote
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Some experts of this field say, "The rate of interest is being slashed very often and it may go down less than 8 per cent in future."
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OF LATE, there is a paradigm shift in people's attitude towards taking houses on rent.
"If what we pay as rent is paid to a bank, we can own our dream home in 10 or 15 years", feel a cross section of the public.
Yet another aspect that vindicates their stand is the availability of apartments at affordable rates, that too, in the main hubs of the city. Added to this, banks too are now liberal in granting loans and they fund up to 85 per cent of the projected estimate.
"The minimum time for sanctioning a loan is less than 24 hours and the maximum is 7 days in our organisation", according to A.Uthaya Kumar, Branch Manager, Can Fin Homes Ltd, Madurai. This span is common in all institutions.
All you need to do is to produce required documents and pay the initial down payment.
A random survey on some of the banks and other institutions in this field showed that the documents required for taking a loan included salary slip, etc., for the salaried class.
For the business class, profit and loss account of the last three years, balance sheet of the same period and details of IT returns filed are the required documents. Besides this, all documents related to property will have to be submitted to the institution, which will keep them till the loan is closed.
In the case of NRIs, they should provide their salary slip, documents of work contract, visa and their NRI account in India.
Regarding process and administration fee, the general rate is 1 per cent and in cases of corporate clients or for customers opting for special schemes, it is 0.5 per cent, equally split for processing and administration, in most agencies.
Though the rate of interests differs, from 0.25 per cent to 1 per cent, among these institutions, it also depends on the schemes and the repayment period. Almost all the institutions have two patterns — variable and fixed. Under the variable rate, the interest is charged as fixed by the Government from time to time. On the payment towards principal also, there are two plans; the annual rest (principal diminishes once a year) and monthly rest (principal diminishes every month).
While there are different options for repayment ranging from five years to 20 years, the mode — salary deduction, post-dated cheques (PDCs), etc., differs from institution to institution. .
As far as the loan ceiling is concerned, the maximum limit goes up to Rs.1 crore. "In Madurai, most of the loan seekers belong to the MIG category and the amount ranges from Rs.5 lakhs to 15 lakhs", says Kingsly, Manager, HDFC.
The institutions themselves carry out all the survey work with their own teams, including seeking of legal opinion. But a nominal fee, which is non-refundable, is collected by some private agencies along with the loan application for this purpose.
The loan for construction of houses is mostly released in three stages.
In case of partial funding, the loan amount is released after the customer utilises his contribution.
Regarding transfer of loans, the common condition is that the borrower should submit the previous year's track record of repayment and there should be no default.
Along with the loan transfer, additional loans are offered for extension, improvement and completion of the construction.
These institutions also have schemes under which a borrower mortgages his/her property and take loans for other purposes.
While most of the nationalised banks insist on taking an insurance cover for the property under transaction, the housing division of the GIC offers it free as a special offer.
Pensioners can also take loans subject to their age and a few other conditions.
In the housing divisions of insurance sector also, the basic formalities are the same as in the banking industry.
The insurance sector housing division companies accept policies and units as security for granting loans.
While these are the prevailing conditions, some experts of this field say, "The rate of interest is being slashed very often and in the last 10 years, it has come down by half from 16 per cent. This is likely to go down further as some banks are contemplating to bring it to less than 8 per cent."
There are also direct selling agents for some institutions who guide and help the customers on how to get loans.
So, anyone who wants to construct, buy or improve their homes just make a phone call to any of the agencies offering house loans, an executive, with a bulk of handbills, will be at your doorstep to offer you loans.
M.R.ARAVINDAN
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Metro Plus
Bangalore
Chennai
Coimbatore
Delhi
Hyderabad
Kochi
Madurai
Thiruvananthapuram
Visakhapatnam
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